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HMRC internal manual

Employment Income Manual

Para 19: loan charge relevant step: qualifying and approved fixed term loan

Schedule 11 F(No 2)A 2017

There are a number of basic conditions which need to apply in order for a loan to be an approved fixed term loan.

  • it must not be fully repaid on 5 April 2019 – an amount of the loan needs to be outstanding on that date
  • it has to have been made before 9 December 2010
  • the loan term cannot exceed 10 years
  • it cannot be an excluded loan

A loan is excluded from these provisions if after the original loan was made, it was replaced, either directly or indirectly, by another loan. A loan will also be excluded if the loan terms have been altered either to meet the requirement that the loan be repaid in 10 years or to postpone the date by which the whole of the loan must be repaid.

An officer of HMRC must also agree by 5 April 2019 that the loan is a qualifying loan. To be a qualifying loan, HMRC needs to agree that the loan meets the qualifying payments condition (see EIM47115) or the commercial terms condition (see EIM47120).